Blow to professionals: New tax on those earning Rs. 5 lakh, above

Salaried professionals and entrepreneurs who reside in east Delhi may have to pay an additional tax on their income from next year onwards.

In a bid to fill its empty coffers, for the first time, the East Delhi Municipal Corporation (EDMC) has proposed that professional tax be imposed on its residents. A number of cities in Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat and Madhya Pradesh impose such a tax.

Salaried professionals, wage earners, consultants, insurance agents, businessman and entrepreneurs, who earn between Rs. 5 lakh and Rs. 10 lakh per annum, will have to pay a yearly sum of Rs. 1,200. Those earning more than Rs. 10 lakh per annum will have to pay Rs. 2,400 per year. Businessmen liable to pay VAT and whose annual turnover is more than Rs. 25 lakh per year will have to pay Rs. 2,500 per annum.

The EDMC plans to rake in Rs. 20 crore from this exercise. According to officials, the details of professionals in the area will be taken from the income tax department.

“Imposing professional tax is completely justified according to law. A lot of other cities are already collecting the tax and using it to build infrastructure. We are also planning to do the same,” said EDMC Commissioner Yadav.

He added that all those professionals who reside in east Delhi will be liable to pay the tax irrespective of whether he/she is employed.